$3.6 billion in budget savings lapse on a technicality

18 April 2016 | The new parliamentary session has caused old bills to be cleared from the docket.

Clearing the decks

The federal government has allowed bills containing a series of unpopular funding cuts from its first two years in office to lapse, raising the prospect that that it is clearing the decks for new savings measures to be introduced in the upcoming Budget.

A number of bills which have been languishing unpassed before the House of Representatives were reclassified "not proceeding" at the weekend, and must be reintroduced if the Government wishes to make them law. Some date from the 2014 Budget, while one was introduced as recently as last month.

Legislation lapsed

The bills contained some of the controversial proposals floated during Tony Abbott's time as Prime Minister. Many would have faced opposition from the Senate crossbench had they proceeded to the upper house. If implemented, the measures would cut $3.6 billion from the Commonwealth's expenses. 

The measures include:

  • increasing the pension age to 70, reducing the indexation rate for pension increases, changes to income and financial assets tests ($388.3 million)
  • preventing parents from "double dipping" into both employer and government paid parental leave schemes ($967.7 million)
  • defining Commonwealth parental leave payments as income for the purposes of Centrelink income-free areas ($105.1 million)
  • moving jobseekers aged 22-24 from Newstart to Youth Allowance ($517 million)
  • making jobseekers under 25 wait a month before being able to claim benefits ($173.3 million)
  • changes to Centrelink waiting period conditions ($241 million)
  • reduce funding to universities thought the Commonwealth Grant Scheme ($902.7 million)
  • abolish discounts for making up-front payments and voluntary repayments to student HELP debts ($276.7 million)

Another lapsed bill would have abolished the Child Care Benefit and Rebate and replaced them with a means- and activity-tested subsidy, as part of the Government's $3.2 billion cash injection for family assistance. 

A bill to provide greater transparency for consumers over the investments made by superannuation funds has also lapsed.

Gone, but not forgotten

The jettisoning of these bills is a consequence of Prime Minister Malcolm Turnbull's manoeuvres to get the Senate to consider the Australian Building and Construction Commission legislation. The Parliament was prorogued to allow it to sit this week, which caused the current parliamentary session to end. When a session of Parliament ends, any bills that are yet to be passed by the house where they originated will lapse.

This does not necessarily mean a change in policy direction. The government is still committed to the Child Care Subsidy, for example. However, there are indications it is working on changes to at least one piece of the legislation. In December the Social Services Minister Christian Porter said that the government was "reconfiguring" the specifics around so-called parental leave 'double dipping'. 

The Turnbull team may take the opportunity to adjust policies introduced under Abbott, to make them more amenable to the crossbench.

The Federal Budget will be delivered on May 3.